Russian Petroleum Company Investing $50 Million in Malaysia

A subsidiary of Orgkhim Biochemical Holding, a Russian company from the petroleum industry, is building a $50 million facility in Malaysia to manufacture petroleum-based extender oils used in tires, synthetic rubbers, and rubber compounds.

The Malaysian Investment Development Authority (MIDA) said the facility will supply markets in the Asia Pacific region with a particular focus on China as well as other established markets including Malaysia and Singapore, the New Straits Times reported.

“We are excited that upon completion of this project, Orgkhim will be the first company to produce carcinogen-free RPOs in Malaysia. It will strategically put Malaysia on the map as one of the few places in the world producing this premium specialty and eco-friendly chemical. Malaysia will certainly benefit from the sizeable patented technology transfer into the country,” Datuk Azman Mahmud, chief executive officer of MIDA said in a statement.

Azman added the direct users of this specialty material, especially companies in the tire and rubber industry, will benefit much from the presence of Orgkhim in the country.

“They will be able to source for more cost-competitive raw materials and improve the quality of their output, resulting in safer and more EU compliant products that are fit for export purposes.

Orgkhim is the top Russian and second worldwide producer of safe petroleum-based extender oils for “green” tires production around the world.

The company’s CEO Nikolay Khodov said the plant would be completed in 15 months’ time and would start operations in the middle of next year.

“Currently we are supplying China, South Korea and other Asian countries directly from Russia. Our volumes are growing. So, we will easily move production of these volumes to Malaysia,” he told reporters.

The company said it will produce 70,000 tons of TDAE (treated distillate aromatic extract), TRAE (treated residual aromatic extract) and S-RAE (safe RAE, green analogue of traditional RAE) products per year.

“Today, we supply China and Korea and other Asian countries directly from Russia. Our volumes are growing so we will easily move production of these volumes to Malaysia,” said Orgkhim’s head of marketing.